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My withholding exceeds my tax liability for each of the the…

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My withholding exceeds my...

My withholding exceeds my tax liability for each of the the first three quarters of 2017. However, in December 2017 I received a taxable gift of $78,000 from which nothing was withheld. I know this must be added to my gross income and taxed appropriately. My question is, "Must I file a quarterly income estimate and prepay taxes on this $78,000 (plus my normal income minus normal withholding) for the fourth quarter? Or do I simply pay any excess tax liability due to this windfall for the whole year without quarterly filings? I had know idea the gift would occur until Christmas of 2017.

Accountant's Assistant: The Accountant will know how to help. Is there anything else the Accountant should be aware of?

Except for the windfall, withholding on all Social Security and investment payments exceeds the tax liability on those payments. Only the windfall in the fourth quarter had no withholding.

Submitted: 1 month ago.Category: Tax
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12/27/2017
Tax Professional: Tax.appeal.168, Tax Accountant replied 1 month ago
Tax.appeal.168
Tax.appeal.168, Tax Accountant
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Tax Professional: Tax.appeal.168, Tax Accountant replied 1 month ago

Taxes must be paid as you earn or receive income during the year, either through withholding or estimated tax payments. If the amount of income tax withheld from your salary or pension is not enough, or if you receive income such as interest, dividends, alimony, self-employment income, capital gains, prizes and awards, you may have to make estimated tax payments.

REFERENCE SOURCE:

https://www.irs.gov/businesses/small-businesses-self-employed/estimated-taxes

--------------------------------

May I ask why you say that the gift is taxable? Typically financial gifts are not taxable.

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Tax Professional: Tax.appeal.168, Tax Accountant replied 1 month ago

I guess we can continue interacting through this thread, the system shows the phone call request has failed.

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